US sales of new homes leap 9.6 percent in January

A sign advertising available homes is posted at a housing development in Dublin, California.

Sales of new single-family homes surged to a 5½-year high in January, which could ease concerns of a sharp slowdown in the housing market.

The Commerce Department said Wednesday that sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000 units, the highest level since July 2008.

December's sales were revised up to a 427,000-unit pace from the previously reported 414,000-unit rate. Economists polled by Reuters had forecast new home sales, which are measured when contracts are signed, falling to a 400,000-unit pace in January.

Sales in the Northeast soared 73.7 percent to a seven-month high, while the South recorded a 10.4 percent rise in transactions to a more than five-year high.

January new home sales hits 9.6%

CNBC's Rick Santelli reports the January new home sales data. Diana Olick provides insight to the number.

These regions have borne the brunt of the unseasonably cold weather that has been blamed for holding back economic activity. Sales, however, tumbled 17.2 percent in the Midwest last month, while rising 11 percent in the West.

Housing lost momentum in the second half of last year following a run-up in mortgage rates and a persistent shortage of properties on the market.

Declines in residential construction and building permits and sales of previously owned homes last month had raised concerns that the sector, which is key to the economy's recovery, was slowing down sharply.

New home sales rose 2.2 percent compared with January 2013.

Last month, the supply of new houses on the market was unchanged at 184,000 units. The median price of a new home last month rose 3.4 percent from January 2013. At January's sales pace it would take 4.7 months to clear the supply of houses on the market. That was down from 5.2 months in December.